Corporate Autonomy and Buyer–Supplier Relationships: The Case of Unsafe Mattel Toys

This article analyses supplier–buyer relationships where the suppliers adapt to the buyers’ needs and expectations to gain mutual advantages. In some cases, such closely knit relationships lead to violations of the autonomy of one or both partners. A concept of corporate autonomy (CA) is developed to analyze this problem. Three different facets can be distinguished: rule autonomy, executive autonomy, and control autonomy. A case study of Mattel’s problems with lead-contaminated toys produced in China shows that the CA of buyer and supplier can be restricted as a result of a dysfunctional partnership involving a moral dilemma.     

The Impact of Relational Variables on Value Creation in Buyer–Seller Business Relationships

Purpose: This research was aimed at attaining a deeper knowledge of how customer value creation can be improved in business markets. Although trust and commitment (as relational governance mechanisms) appear to have a positive effect on customer value creation, limited empirical evidence exists about the combined effect of the aforementioned variables on improving customer value creation. This article studies why trust and commitment are key precursors to improving customer value creation in commercial relationships among companies.

Methodology: Following a review of the literature, we introduce and contrast a conceptual model on a sample of 181 manufacturing companies located in Spain by means of a structural equation system.

Originality: The study of these causal relationships is relevant because it provides greater knowledge of the role played by the key relational variables of trust and commitment on improving customer value creation in business markets. These variables also have an important influence on the development and maintenance of a relationship in the long term and have been the focus of recent marketing research.

Findings: The empirical results reveal that: (1) distributor commitment is a direct and positive antecedent of value creation in a relationship, understood from a functionalist perspective; (2) distributor trust, the other relational variable, has an indirect effect on value creation through the distributor's commitment; and (3) this research does not tie in with previous studies that found that direct value-creating functions have a multiple-component nature representing a second-order factor.     

Value Creation and Category Management through Retailer–Supplier Relationships

Abstract

This article discusses category management interactions in supplier–retailer relationships based on conceptual insights about value in business markets. Much category management literature has studied supplier–retailer relationships, but despite value creation being central to category management the conceptual approach is often the power-trust controversy. Based on value concept, category management and supplier–retailer relationship literature this study develops a model and hypotheses of retailer perceived benefits and sacrifices from category management collaboration. The article proposes that closer supplier-retailer interactions through the category management process hold the potential for increased value creation through application of complementary information resources, an improved coordination of tactical efforts, and an alignment of category aims and strategies explicitly linked to retailers' value systems. Further, the perceived necessity of trust in these relationships meshes with retailers' perceived sacrifices regarding negotiation power and full control of category marketing variables, thus establishing a trade-off for retailers between benefits and sacrifices.     

Opportunism in Buyer–Supplier Relations: New Insights from Quantitative Synthesis

After more than two decades of empirical research examining opportunism, a wide divergence of empirical findings regarding opportunism's antecedents remains. The need for more theoretically practicable and managerially actionable insight into the identity, nature, and scope of the antecedents to opportunism is clear. As such, a meta-analysis of the opportunism literature was conducted to (a) investigate the role of six antecedents (dependence, formalization, centralization, control, uncertainty, and relational norms), (b) resolve the disparate relationships' magnitudes and directions, and (c) identify moderators that might explain the disparate effect sizes. Findings suggest extant research findings are affected by socially desirable response bias; the particular operationalization of constructs, for example, whether measured opportunism is actual or perceived or whether the study omitted key antecedents; and whether the sample included firms offering products or services. Theoretical and managerial implications are developed and discussed.     

The Buyer–Supplier Relationship: An Integrative Model of Ethics and Trust

Dialogues between companies and actors of society often start as a result of a public scandal or in a situation of crisis. They can lead to short-term public relations activism or to long-term reputation gains. On the basis of cases and of a typology of forms of dialogues, the author develops ethical criteria and conditions for a successful dialogue – the ethical basis for such criteria being values such as equality, freedom and participation. A special focus is put on challenges that often result from dialogues such as the ethical judgment of compromises. This article proposes ethical criteria to evaluate compromises. This leads to a model of ethical dialogue.     

The Influence of Contractual Governance Mechanisms,Buyer–Supplier Trust,and Supplier Opportunistic Behavior on Supplier Performance

This article explores the influence of contractual governance mechanisms, buyer–supplier trust, and supplier opportunistic behavior on Uganda's public sector supplier performance. Many outsourced contracts are reported to frequently fail to deliver on time, budget, specifications, and quality and do not deliver value to the public. This could be attributed to poor contractual governance mechanisms, lack of buyer–supplier trust, and high levels of supplier opportunistic behavior. A cross-sectional data set collected from 632 staff of Uganda's public sector is used to validate the theoretical model and hypotheses developed from literature review. Findings reveal that contractual governance mechanisms, buyer–supplier trust, and supplier opportunistic behavior are significant predictors of public sector supplier performance. The results also suggest that supplier opportunistic behavior has a stronger influence toward supplier performance than others. The implications for these findings for future research and practice are also discussed.     

The Effect of Dissolution Intention on Buyer–Seller Relationships

While relationships dissolve for a variety of reasons, many dissolve due to issues with the relationship itself. However, much of the research in marketing focuses on the bright side of relationships and neglects its dark side. In this article we focus on one aspect of the dark side—the effects of the intent of a party to exit from a relationship. Research on dissolution has primarily examined it as an outcome variable. Thus, the question of how dissolution intent, once formed, affects subsequent behavior has not been given much attention. We investigate the consequences of dissolution intention, such as increasing opportunism and decreasing cooperation and the mediating effects of transaction-specific investments. The model is tested using a sample survey of newspaper agents in Korea. Results indicate that dissolution intention increases opportunism and negatively affects cooperation. Transaction-specific investments diminish the effect of dissolution intention on opportunism and cooperation.     

Conflict in Supplier–Retailer Relationships in the Brewery Industry in Cameroon

The authors develop a theoretical framework to explain conflict in supplier–retailer relationships. In addition to traditional influence strategy variables, the framework links conflict to retailer dependence and supplier formalization. The framework is empirically tested in the Cameroonian brewery industry. The findings support the view that channel conflict is inversely related to retailer dependence and supplier formalization. Contrary to expectations, the use of noncoercive influence strategies (information exchange and recommendations) has no significant effect on conflict, while, as expected, the use of coercive influence strategies (threats and promises) increases conflict.     

The Use of Accommodation in Buyer–Seller Relationships: Encouraging or Controlling Opportunism in Business Markets Middle-grounds

ABSTRACT

Purpose: In the past decades, marketing researchers have explored different strategies to control opportunism in buyer–seller relationships. Accommodation, the cooperative response to partners’ exploitive behavior in exchange relationships, has received increasing attention from research on interfirm relationships. However, less is known about whether accommodation is an effective response strategy for controlling opportunism. Drawing on the self-enforcing agreement literature, this article focuses on exploring (1) what drives a firm’s accommodation response to its partner’s exploitive behavior, (2) how a firm’s accommodation helps govern its exchange partner’s opportunistic behavior, and (3) whether monitoring magnifies or buffers the effect of accommodation on the exchange partners’ opportunism.

Methodology: The survey data were collected from 173 seller-firms in Guangdong, Shanghai, Beijing, Wuhan, and Zhengzhou, representing the south, east, north, and middle regions of China. The initial questionnaires were distributed mainly by mail. By assessing the nonresponse bias and the potential bias of early and late responses, we detected no significant differences, implying that the aforementioned biases are not a concern. Because PLS can readily model both formative and reflective constructs, and accommodation is a formative construct, we deployed the SmartPLS software program to test our model.

Findings: This article enables a deeper understanding of accommodation as a response strategy in buyer–seller relationships. The data analysis offers supportive evidence that a firm’s level of accommodation is positively related to two exchange attributes: joint-specific investments and observability of the exchanges. Accommodation, as a cooperative response strategy, curtails opportunism in buyer–seller relationships, and such a curtailing role is magnified when accompanied with monitoring.

Originality/value/contribution: The authors develop a framework to examine previously untested relationships, which suggest accommodation is a cooperative response strategy to mitigate opportunism. We also contribute by exploring the antecedents of accommodation from the tangible transaction attributes perspective. Specifically, two exchange attributes, joint-specific investments and observability, can explain the emergence of accommodation. In addition, we examine the combined effect of competitive response strategies and cooperative response strategies on controlling partner opportunism. That is, competitive response strategies (i.e., monitoring) strengthen the governing effect of cooperative response strategies (i.e., accommodation).     

Managing Critical Spare Parts within a Buyer–Supplier Dyad: Buyer Preferences for Ownership and Placement

Despite the criticality and expense of spare parts, many firms lack a coherent strategy for ensuring needed supply of spare parts. Moreover, scientific research regarding a comprehensive spare parts strategy is sparse in comparison with direct material. Our research identifies and tests three literature-based, theoretically anchored attributes that influence a buyer's preference for inventory ownership and inventory placement when managing the stock of a critical spare part. Our findings indicate that item specificity and item supply uncertainty are useful in predicting a buyer's preference for managing the inventory of a critical spare part. Furthermore, we find that buyers have (1) a strong preference for consignment-based inventory management approaches, (2) a bias against inventory speculation despite its use in practice and analytical models, and (3) a strong preference for inventory postponement when the level of supply uncertainty is low.     

Purchasing Ethics and Inter-Organizational Buyer–Supplier Relational Determinants: A Conceptual Framework

This study examines unethical purchasing practices from the perspective of buyer–supplier relationships. Based on a review of the inter-organizational literature and qualitative data from in-depth interviews with purchase managers from diverse industries, a conceptual framework is proposed, and theoretical arguments leading to propositions are presented. Taking into consideration the presence or absence of an explicit or implicit company policy sanctioning ethically questionable activities, unethical purchasing practices are conceptualized as a three-tiered set. Three broad themes emerge from the analysis toward explaining purchasing ethics from a buyer–seller perspective: (a) Inter-organizational power issues (inter-organizational power and idiosyncratic investments), (b) Inter-organizational relational issues (long-term orientation and satisfaction), and (c) Interpersonal relational issues (interpersonal ties and trust). Theoretical and managerial implications of the conceptual framework are discussed.     

Gift Giving,Guanxi and Illicit Payments in Buyer–Supplier Relations in China: Analysing the Experience of UK Companies

This paper explores the relationship between gift giving, guanxi and corruption through a study of the relationships between UK manufacturing companies in China and their local component suppliers. The analysis is based on interviews in the China-based operations of 49 UK companies. Interviews were carried out both with senior (often expatriate) staff and with local line managers who were responsible for everyday purchasing decisions and for managing relationships with suppliers. The results suggest that gift giving is perceived to be a significant problem in UK-owned companies in China. However the relationship between these payments and established understanding of gift giving within guanxi-networks appears to be weak. Gift giving appears to be associated with illicit payments, corruption and the pursuit of self-interest. Firms seek to reduce the incidence of illicit transactions by changing staff roles, instituting joint responsibilities, which include the separation of different aspects of sourcing/purchasing, ineasing the involvement of senior staff in the process and through the education of employee and suppliers.     

Value Congruence and Charismatic Leadership in CEO–Top Manager Relationships: An Empirical Investigation

Although charismatic leadership theorists have long argued that leader–follower value congruence plays a central role in the development of charismatic relationships, few studies have tested this proposition. Using data from two studies involving a total of 329 CEOs and 1807 members of their top management teams, we tested the hypothesis that value congruence between leaders and their followers is empirically linked to follower perceptions of the charisma of their leader. Consistent with a relational perspective on charismatic leadership, strong support was found for the hypothesis that perceived value congruence between leaders (CEOs) and their followers (members of their top management teams) is positively related to follower perceptions of the degree of charisma possessed by the leader. Conversely, only limited support was found for the hypothesis that actual value congruence is linked to perceptions of charismatic leadership. Implications of these findings for research and practice are discussed.     

The Power of Innovativeness in Manufacturer–Retailer Relationships

ABSTRACT

Purpose: Retailers often challenge manufacturers through aggressive store brand policies and severe listing constraints. This study investigates manufacturer innovativeness as a managerial lever to shift the power balance between manufacturers and retailers.

Methodology/approach: Using data from 277 senior managers of Swiss and German consumer goods manufacturers and analyzing these data with structural equation modelling, the authors test hypotheses about the impact of manufacturer innovativeness on manufacturer–retailer relationship characteristics (i.e., retailer dependency, store brand aggressiveness, and listing constraints).

Findings: The study demonstrates that manufacturer innovativeness enhances retailer dependency, which in turn positively affects overall manufacturer performance. This relationship can be explained further: By increasing retailer dependency, manufacturers suppress retailers’ store brand aggressiveness and attenuate retailers’ listing constraints. Store brand aggressiveness affects overall manufacturer performance through listing constraints.

Research implications: Identifying levers such as innovativeness that assist manufacturers in fostering their power over retailers provides a new mode for understanding how manufacturers can influence the balance of power between manufacturers and retailers. The study provides support for the approach/inhibition theory of power on the inter-organizational level. Organizations with increased power are assumed to have approach-related tendencies and act in goal-consistent manner, whereas organizations with reduced power are assumed to develop the tendency to pursue inhibition-related actions, e.g., attending to threats. Furthermore, this study identifies channel relationship characteristics such as retailer dependency as a mediating path between manufacturer innovativeness and performance.

Practical implications: Managers need to strengthen the firm’s innovative capacity to enhance the performance of their companies. By developing the capability to provide radical innovations, manufacturers are able to enhance their performance not only directly but also indirectly by strengthening the manufacturer’s position with regard to retailers. This study underscores the relevance of innovativeness for strengthening the manufacturer’s position in its relationship with retailers that avoids problems with aggressive store brands and constrained listing conditions.

Originality/value/contribution: This study proposes manufacturer innovativeness as a managerial lever to shift the power balance between manufacturers and retailers.     

The Impact of Service Supplier’s Unethical Behavior to Buyer’s Satisfaction: An Empirical Study

In today??s marketing conditions, it becomes really vital for companies to establish an appropriate relationship with suppliers and salesperson based on ethical values in order to survive. Besides, ensuring an effective relationship between the parties would contribute to increase buyer satisfaction along with economic and social satisfaction. In this study, the direct effects of suppliers?? and salespersons?? unethical behaviors on buyer satisfaction, and the moderator effect of communication between buyer?Csupplier relationships are examined. The results of the study have revealed that unethical behaviors of suppliers and salesperson affect buyer satisfaction negatively and the communication variable has moderately affected. The results are providing important advantages for buyers who want to improve the relationships between the suppliers and their salesperson for pharmaceutical enterprises.     

Conflict and Confluence: The Multidimensionality of Opportunism in Principal–Agent Relationships

This comparative study explores 499 corporate social responsibility (CSR) initiatives implemented by 178 corporations in five distinct, institutionally consistent European clusters. This study provides an empirically grounded response to calls to develop comprehensive, nuanced pictures of CSR in the composite European business environment. In so doing, the article stresses three distinct, non-exclusive approaches that characterize the embedding of CSR considerations in corporations’ strategies across Europe and the CSR challenges for corporations operating in different socio-political contexts. Furthermore, the study reaffirms the CSR notion as a contextualized concept, shaped by socio-political drivers, and contributes by bridging macro-level, socio-political facets of CSR with its meso-level, organizational implications.     

The Hunt–Vitell General Theoryof Marketing Ethics: Can it Enhance our Understanding of Principal-Agent Relationships in Channels of Distribution?

This paper advances the Hunt–Vitell General Theory of Marketing Ethics as a framework for enriching current understanding of both long-term marketing relationships in general, and principal-agent associations specifically. Under economic models of agency theory, manufacturer-distributor relationships are conceptualized as principal-agent associations where both parties are assumed be motivated exclusively by short-term financial self-interest within the logical constraints of zero-sum game conditions. As a general model of ethical decision making and behavior in marketing, the Hunt–Vitell theory illustrates how ethical decisions are predicated not only upon estimations of potential benefits or outcomes (using teleological criteria), but also deontological evaluations which invoke norms and values. Furthermore, the recent ideas advanced in "relationship marketing" perspectives suggest that distribution channel associations premised upon non-zero-sum or symbiotic assumptions may be more effective and more jointly profitable. Based upon the Hunt–Vitell model, propositions are formulated that complement the understanding of agency theory within the context of marketing channel relationships, and thus, may represent a basis for more effective agency selection and interaction in marketing practice.     

How Does Corporate Social Responsibility Affect Consumer Response to Service Failure in Buyer–Seller Relationships?

The researchers investigate how corporate social responsibility (CSR) affects customer response following service failure within the context of buyer–seller relationships. A series of three experiments demonstrate that CSR is more effective under communal (vs. exchange) relationship norms, consistent with the alignment of CSR with the communal norm of concern for the needs of others. The effectiveness of CSR is also shown to vary as a function of company motives and CSR framing, serving as theoretically and managerially relevant boundary conditions. Together, these findings increase our understanding of how and when CSR will have a positive impact on consumers and, in turn, companies via customer satisfaction and loyalty.